NZR
17/03/2016 09:31
MONTHLY
PRICE SENSITIVE
REL: 0931 HRS The New Zealand Refining Company Limited
MONTHLY: NZR: Throughput and Margin Report January-February 2016
Refining NZ Throughput and Margin Report for January/February 2016
The Gross Refinery Margin1) (GRM) for the January/February period - prior to
Cap adjustments - was USD 7.96 per barrel, at the top end of the historical
margin range. The resulting Processing Fee income was NZD 57.0 million,
including a Margin Cap2) adjustment for the period of NZD 0.7 million. This
amount will be recovered in future months if the GRM moves below the Margin
Cap.
Throughput was below expectation at 6.8 million barrels, due to late crude
ship arrivals which caused slowdowns of the crude distillers and sub-optimal
refinery operation during the last two weeks of February.
The Singapore Dubai complex margin for the period remained strong at an
average of USD 4.95 per barrel as a result of weak Dubai crude prices.
Refining NZ's margin uplift over this Singapore complex margin was USD 3.01
per barrel. The uplift for the period was affected by a number of factors
including a weakening of the freight uplift by USD 1.25 per barrel, light
crude price increases versus Dubai of around USD 0.80 per barrel (priced off
Brent as benchmark) and sub-optimal refinery operation. Te Mahi Hou continued
to operate in line with expectations.
The average exchange rate for the period was USD/NZD 0.66.
A planned shutdown of the hydrocracker and related units to replace some of
the catalyst and to perform maintenance work, will take place in April. The
impact has been factored into the profit matrix for 2016, presented with our
analyst briefing. Refining NZ's margin during the March/April period will be
negatively impacted as a result of the hydrocracker being off-line, since
this limits the company's ability to upgrade lower cost feedstock into high
value products.
Appendix I shows further information on throughput, margin and refining
income.
Historical Analysis
A five year history of Throughput, Margins and Processing Fees is attached as
Appendix II and can also be found on the company's website:
www.refiningnz.com
1) The Margin Cap limits the Processing Fee to a maximum Gross Refining
Margin of 9 USD per barrel for over a calendar year. The Margin Cap applies
to each Customer severally (see Explanatory Notes for more detail).
2) Refining NZ's Gross Refining Margin is defined as the typical market value
of the products produced minus the typical market value of the feedstock
used, expressed per barrel of feedstock used. The margin incorporates the
cost of the hydrocarbon used for fuel and incurred as process losses.
End CA:00279408 For:NZR Type:MONTHLY Time:2016-03-17 09:31:06
